CURRENCY : Dollar Sags on Report of Retail Sales

NEW YORK —  The dollar ended weaker against most key currencies in quiet trading Tuesday following the release of what foreign exchange dealers called disappointing U.S. retail sales figures.

Gold prices strengthened. Republic National Bank of New York quoted a bid of $395.50 an ounce of gold as of 4 p.m. EST, up $2.50 from Monday’s late bid.

Earl I. Johnson, a currency dealer at Harris Trust & Co. in Chicago, said the dollar was depressed by a Commerce Department report showing February retail sales had fallen 0.4%.

“It was slightly disappointing,” Johnson said. “The market had expected sales to go up 0.5%.”

Johnson said the decline lessened the possibility of higher interest rates, which often helps firm the dollar.

Dealers said domestic trading was quiet in advance of today’s release of the January merchandise trade report.

Overseas, traders said the British pound gained from the dollar’s weakness. Sterling also was buoyed by the British national budget announced for the 1989-90 fiscal year.

In London, one pound cost $1.7170, more expensive for buyers than Monday’s late $1.7125. Sterling fetched $1.7280 in New York, up from $1.71295.

Earlier in Tokyo, the dollar rose to 129.92 Japanese yen from 129.57 late Monday. The dollar traded at 129.85 yen in London, and at 129.79 yen in New York, down from 130.175.